Canada firm gives offer to De Beers in diamond row
By Darren Shuettler
JOHANNESBURG, May 4 (Reuters) - Canada's SouthernEra Resources Ltd <SUF.TO> said on Monday that it had a plan to resolve a dispute with diamond giant De Beers Consolidated Mines <DBRS.J> over a diamond-rich farm in South Africa.
The Toronto-listed prospector said it expected to discuss its proposal with De Beers officials at their next round of talks on Wednesday in Johannesburg.
"I believe we've got to a point where we will be starting to make real progress," SouthernEra chairman and president Christopher Jennings told Reuters.
"I think we've come with what I think is a workable solution and they either will play along with it, or play hardball," Jennings said in an interview after returning from London where he held talks on Friday with De Beers officials.
Jennings declined to give details on the offer, but he said it would satisfy all the parties concerned.
"Its a very complex thing where I believe everyone will score. No one should left out of the deal," he said.
SouthernEra officials said last week they would be prepared to enter into a marketing agreement with De Beers as part of a settlement.
SouthernEra, de Beers and 29 heirs to the Marsfontein farm have been trying to negotiate a settlement in recent weeks to avoid a messy court battle over mineral rights to the farm.
"I think we're making progress and I have to be an optimist that we will sort it out," Jennings said of Friday's negotiations.
Asked when an agreement may be hammered out, he said: "I don't know. I'm sure it will be less than a week now, but I may be hopeful."
De Beers has declined to comment on the negotiations.
The battle over the Marsfontein farm, part of SouthernEra's lucrative Klipspringer project, began in January when the heirs obtained an injunction preventing the South African government from transferring the mineral rights to SouthernEra and its South African partner, Randgold. The injunction is based on a claim by 29 people who say they are descendants of the former owners of the land, located about 300 km (187 miles) north of Johannesburg.
SouthernEra said it checked back several generations and could find no evidence of mineral rights being passed on to heirs. It launched a court bid to secure the mineral rights.
In April, the heirs, through a company NGS Minerals, agreed to a prospecting contract with De Beers. The terms of the deal were not disclosed, but South African newspapers have valued the contract at up to 75 million rand.
De Beers has said it would not finalise the deal until SouthernEra's court case is decided.
De Beers, through its Central Selling Organisation (CSO) marketing arm, controls 70 percent of the world's uncut diamond sales. Aside from its own mines, de Beers has partnerships with diamond producing countries such as Botswana, Namibia and Tanzania.
Since the controversy began, SouthernEra's stock price has sunk to a 52-week low of C$6.90 per share from a high of C$20.80. The stock was trading down C25 cents at C$9.00 on the Toronto Stock Exchange on Monday.
((Johannesburg newsroom + 27 11 482-1003
newsroom@reuters.co.za
Monday, 4 May 1998 13:30:58
RTRS [nN04102586] |
